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Ex-Post ERP Evaluation at an SME Trading Company in Mexico City

Overmars, Daan (2010) Ex-Post ERP Evaluation at an SME Trading Company in Mexico City.

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Abstract:TradCo (TC) is specialized in trading promotional items in Mexico. These items are sourced in Asia en marketed in Mexico. In the last years TC grew with double digit numbers, but the IT infrastructure of the company did not grow with it. The current enterprise resource planning (ERP) system of TC is not sufficient to support the organization. The current system does not have real-time management reports, no support for multiple business units & warehouses and no possibility to include an e-Commerce application at the current ERP system. TradCo started the implementation of a new ERP system in June 2007. This implementation proceeded not as expected with as result a delay in the implementation. When the delay became almost more than half a year an external evaluation of the ERP implementation was started. This report is the result of this evaluation. The main problem statement of this report is: “To which extent is the ERP implementation at TradCo successful?” Answering this question is possible when there is an evaluation model for an ERP implementation at small and medium enterprise (SME) in Latin America available. There was no model found that meet these requirements. Therefore a new model is developed to evaluate an ERP implementation at an SME in Latin America, namely ex-post ERP Evaluation Model for SME’s in Latin America (eEEMSLA). EEEMSLA is a matrix model with on the vertical axis the parts: Process, Content and Context (Devos & Buelens, 2003) and on the horizontal side four chronological phases. The chronological phases are from the Enterprise System Experience Cycle (Markus & Tanis, 2000). Every phase contains a process, content and context part. The first phase, Chartering Phase, starts at the initiation of the project and goes over into the second phase when the system selection has been made and presented. The second phase, The Project, runs till the system goes live. The third phase, Shakedown, goes over in the fourth phase, Onward & Upward, when the system is used as business as usual. The fourth phase does never end, only when the system is not used anymore or replaced. EEMSLA is used to evaluate the ERP implementation at TC in chronological order, along the four phases. The necessary data for the evaluation is collected in two periods. In the first period, between February 2008 and June 2008, observations, interviews and document reviews are carried out. In December 2009 a survey is executed to gather data from the period after the going live data (January 2009). The collection of data from these four sources is used to evaluate the ERP implementation at TC with eEEMSLA. The analysis of the data resulted in positive, neutral and negative elements for every square of the matrix. Putting all these elements together in the model with a color code for being positive, neutral or negative result in a good overview of the parts which went well en the parts which were negative evaluated, see figure 7. The first phase of the implementation is minimal executed, which resulted in a system choice that is not completely grounded on the normal ERP selection procedures. TradCo chose a custom build ERP system, because it is cheaper, fits better to the organization and is from a known provider. In the second phase the process is not controlled well by the implementation team, knowledge was insufficient and deadlines were violated, which results in a final delay of a year. The new custom build ERP system functions well, this means that the content of the second phase is finally well received. In the third phase the process is still not under control, one year after the going live date people still have problems with the new procedures. Management is satisfied with the result, since the system satisfies all requirements of management. The employees are less satisfied, since their wishes were not added to the requirements and are thus not realized. The overall evaluation analysis of eEEMSLA resulted in the answer that the implementation failed. The final conclusion, based on the opinion of management, employees and eEEMSLA, is that the implementation failed.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Industrial Engineering and Management MSc (60029)
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